Changes to ATO Clearance Certificate from 1 July 2017

The government has announced changes to the foreign resident capital gains withholding threshold and withholding rate, commonly known by property solicitors, conveyancers and real estate agents as the Australian Taxation Office (“ATO”) Clearance Certificate. From on and after 1 July 2017, Contracts for the sale and purchase of land where the property sells for over $750,000.00 (down from $2 million) will require an ATO Clearance Certificate from the vendor. Otherwise the purchaser must withhold 12.5% of the purchase price (up from 10%) and remit it to the ATO at settlement. This change will now mean that the ATO Clearance Certificate will be required for a large majority of properties sold in the Sydney metropolitan area.

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